Bajaj Finance Limited's stock soared more than 7% following the Reserve Bank of India's decision to lift restrictions previously imposed on the company's Insta EMI Card.

The surge in stock prices reflects investor confidence restored by the regulatory clearance, signalling a positive outlook for the company's financial product offerings.

Previously, the RBI had directed Bajaj Finance to halt issuing new Insta EMI Cards. This directive was part of a broader scrutiny of compliance with regulatory standards across the consumer lending sector.

The RBI’s concerns were primarily focused on the adherence to norms related to Know Your Customer (KYC) and other regulatory prerequisites.

The prohibition notably impacted the company's new customer acquisition strategies and was seen as a significant hindrance to growth prospects in the burgeoning digital finance sector.

However, recent communications from Bajaj Finance to the stock exchanges have confirmed that the RBI has now removed these restrictions, allowing the company to resume issuing new Insta EMI Cards effective immediately.

This development comes as a significant relief to the firm, which can now accelerate its customer engagement and product distribution that had been curtailed.

In their communication, Bajaj Finance expressed their commitment to ensuring full compliance with the RBI’s regulatory framework and improving their system to meet the required standards.

The company also emphasized their ongoing efforts to enhance its service offerings and customer experience in line with regulatory expectations.

The lifting of the RBI’s restrictions is likely to bolster Bajaj Finance's position in the competitive consumer finance market.

Analysts believe that the ability to issue new cards will not only help in recovering from past limitations but also in capturing a larger market share by tapping into the high demand for consumer credit products.

The news of the regulatory relief was positively received in the market, as evidenced by a more than 7% increase in Bajaj Finance’s share prices in early trading sessions.

This uptick is a testament to the market's bullish outlook on the company's growth trajectory post-clearance.

Looking forward, Bajaj Finance is poised to leverage this opportunity to expand its consumer base and consolidate its footprint in the digital lending space, which continues to see robust growth driven by technological advancements and changing consumer credit behaviour.